Joe is in the market for a mattress.He is deciding between two different mattresses: one that is fairly expensive but offers a free 20-year manufacturer's warranty and another that is lower-priced but only offers a one-year manufacturer's warranty.Joe's decision to purchase the more expensive mattress would indicate that
A) Joe has a high level of income.
B) Joe is not price sensitive.
C) Joe interpreted the manufacturer's warranty as a quality indicator.
D) Joe is not a utility maximizer.

Question

Quizplus · Accepted Answer

Joe's decision to purchase the more expensive mattress indicates that he values the 20-year manufacturer's warranty, which he may interpret as a quality indicator. This suggests that Joe is not solely focused on price and is willing to pay more for a product that offers better value in terms of quality and peace of mind.

Joe Is in the Market for a Mattress